Editing Economy of Sri Lanka (section)

== External sector ==

=== Trade account issues ===

In the recent past, the Sri Lankan Government has identified some key focal areas to address the external imbalances of the economy, especially with regard to reducing its high trade deficit (≈15% of [[GDP]] for 2012) in order to make the economy comply with the [[Marshall–Lerner condition]]. Sri Lanka's oil import bill accounts for an estimated 27% of total imports while its pro-growth policies have resulted in an investment goods import component of 24% of total imports. These inelastic import components have led to Sri Lanka's Export goods price elasticity + Import goods price elasticity totalling less than 1, resulting in the country not complying with the [[Marshall–Lerner condition]].

Some of the suggested proposals include:
* Import substitution of investment goods and consumer goods
* Tax concessions towards value-added exports
* Negotiating longer credit periods for oil imports
* Allowing the external value of the currency to be determined by market forces (with minimal central bank intervention)

=== Capital account ===
* Within the capital account, borrowings still account for a significant proportion as opposed to [[Foreign direct investment]]s
* FDIs were estimated at ~US$800mn for FY2012

=== Overall balance (BOP) ===
* The economy ended with an overall positive balance of US$151mn for 2012 (vs. a US$1,061mn deficit in FY2011)<ref>{{Cite web |title=Central Bank of Sri Lanka: Roadmap 2013 |url=http://www.cbsl.gov.lk/roadmap/RM2013.pdf |url-status=live |access-date=2022-06-29 |website=Wayback Machine|archive-url=https://web.archive.org/web/20130123204139/http://www.cbsl.gov.lk/roadmap/RM2013.pdf |archive-date=23 January 2013 }}</ref>